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Catalent (CTLT) Up 4.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Catalent (CTLT - Free Report) . Shares have added about 4.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Catalent due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Catalent Preliminary Q1 Revenues Dampened by Lower Sales
Catalent reported preliminary first-quarter fiscal 2024 adjusted loss per share of 10 cents against the year-over-year period’s earnings per share of 34 cents. The metric was narrower than the Zacks Consensus Estimate of a loss of 13 cents per share.
The adjustments include charges related to amortization, and acquisition, integration and other special items’ costs, among others.
The company’s GAAP loss per share (including non-cash goodwill impairment charges of $700 million and incorporating the effect of a $29 million deferred tax adjustment) was $3.94 during the quarter, against the year-over-year period’s breakeven earnings per share.
Revenues in Detail
Per the preliminary report, revenues grossed $982 million in the reported quarter, down 3.9% year over year. However, the metric surpassed the Zacks Consensus Estimate by 5.2%.
At CER, revenues were also down 6%.
The top line was hampered by soft performances in its Biologics segment in the reported quarter.
Organic net revenues (excluding the impact of acquisitions, divestitures and currency translation) decreased 8% year over year.
Segments in Detail
Per Catalent’s new organizational structure, it reports via two segments — Biologics and PCH.
Per the preliminary report, revenues in the Biologics segment fell 14.5% year over year on a reported basis (down 16% at CER) to $447 million in the quarter under review. The decline was primarily due to significantly lower year-on-year COVID-19 demand.
Per the preliminary report, revenues in the PCH segment increased 7.2% from the year-ago period (up 5% at CER) to $535 million. The segment's revenue growth was primarily driven by the prior year's acquisition of Metrics.
Operational Update
In the quarter under review, Catalent’s gross profit fell 29.8% to $181 million. The gross margin contracted 681 basis points to 18.4%.
Selling, general and administrative expenses rose 9.7% to $215 million year over year.
Adjusted operating loss totaled $34 million against the prior-year quarter’s adjusted operating profit of $62 million.
Financial Update
Catalent exited first-quarter fiscal 2024 with cash and cash equivalents of $209 million compared with $280 million at the end of fiscal 2023. Total debt at the first-quarter fiscal 2024-end was $4.95 billion compared with $4.85 billion at the end of fiscal 2023.
Net cash used in operating activities at the end of first-quarter fiscal 2023 was $70 million compared with $92 million a year ago.
Guidance
Catalent has revised its financial outlook for fiscal 2024.
The company continues to project revenues between $4,300 million and $4,500 million for the full year, reflecting growth of 1-5% from the comparable fiscal 2023 period. The Zacks Consensus Estimate for fiscal 2024 revenues is currently pegged at $4.35 billion.
COVID revenues for the full fiscal year are now projected to be $180 million, up from the previous outlook of $130 million.
PCH revenues for the full fiscal year are continued to be projected to be mid- to high-single-digit revenue growth.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -221.88% due to these changes.
VGM Scores
At this time, Catalent has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Catalent has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Catalent belongs to the Zacks Medical - Drugs industry. Another stock from the same industry, United Therapeutics (UTHR - Free Report) , has gained 12.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
United Therapeutics reported revenues of $609.4 million in the last reported quarter, representing a year-over-year change of +18.1%. EPS of $5.38 for the same period compares with $4.91 a year ago.
For the current quarter, United Therapeutics is expected to post earnings of $3.79 per share, indicating a change of +42% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.
United Therapeutics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Catalent (CTLT) Up 4.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Catalent (CTLT - Free Report) . Shares have added about 4.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Catalent due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Catalent Preliminary Q1 Revenues Dampened by Lower Sales
Catalent reported preliminary first-quarter fiscal 2024 adjusted loss per share of 10 cents against the year-over-year period’s earnings per share of 34 cents. The metric was narrower than the Zacks Consensus Estimate of a loss of 13 cents per share.
The adjustments include charges related to amortization, and acquisition, integration and other special items’ costs, among others.
The company’s GAAP loss per share (including non-cash goodwill impairment charges of $700 million and incorporating the effect of a $29 million deferred tax adjustment) was $3.94 during the quarter, against the year-over-year period’s breakeven earnings per share.
Revenues in Detail
Per the preliminary report, revenues grossed $982 million in the reported quarter, down 3.9% year over year. However, the metric surpassed the Zacks Consensus Estimate by 5.2%.
At CER, revenues were also down 6%.
The top line was hampered by soft performances in its Biologics segment in the reported quarter.
Organic net revenues (excluding the impact of acquisitions, divestitures and currency translation) decreased 8% year over year.
Segments in Detail
Per Catalent’s new organizational structure, it reports via two segments — Biologics and PCH.
Per the preliminary report, revenues in the Biologics segment fell 14.5% year over year on a reported basis (down 16% at CER) to $447 million in the quarter under review. The decline was primarily due to significantly lower year-on-year COVID-19 demand.
Per the preliminary report, revenues in the PCH segment increased 7.2% from the year-ago period (up 5% at CER) to $535 million. The segment's revenue growth was primarily driven by the prior year's acquisition of Metrics.
Operational Update
In the quarter under review, Catalent’s gross profit fell 29.8% to $181 million. The gross margin contracted 681 basis points to 18.4%.
Selling, general and administrative expenses rose 9.7% to $215 million year over year.
Adjusted operating loss totaled $34 million against the prior-year quarter’s adjusted operating profit of $62 million.
Financial Update
Catalent exited first-quarter fiscal 2024 with cash and cash equivalents of $209 million compared with $280 million at the end of fiscal 2023. Total debt at the first-quarter fiscal 2024-end was $4.95 billion compared with $4.85 billion at the end of fiscal 2023.
Net cash used in operating activities at the end of first-quarter fiscal 2023 was $70 million compared with $92 million a year ago.
Guidance
Catalent has revised its financial outlook for fiscal 2024.
The company continues to project revenues between $4,300 million and $4,500 million for the full year, reflecting growth of 1-5% from the comparable fiscal 2023 period. The Zacks Consensus Estimate for fiscal 2024 revenues is currently pegged at $4.35 billion.
COVID revenues for the full fiscal year are now projected to be $180 million, up from the previous outlook of $130 million.
PCH revenues for the full fiscal year are continued to be projected to be mid- to high-single-digit revenue growth.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -221.88% due to these changes.
VGM Scores
At this time, Catalent has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Catalent has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Catalent belongs to the Zacks Medical - Drugs industry. Another stock from the same industry, United Therapeutics (UTHR - Free Report) , has gained 12.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
United Therapeutics reported revenues of $609.4 million in the last reported quarter, representing a year-over-year change of +18.1%. EPS of $5.38 for the same period compares with $4.91 a year ago.
For the current quarter, United Therapeutics is expected to post earnings of $3.79 per share, indicating a change of +42% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.
United Therapeutics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.